Question: What government fast-tracks a project with a budget in the billions that was proposed by a Crown corporation already deep in the red whose reputation for cost escalations rivals those of Olympic host cities?

Answer: The current provincial government, that’s who. In 2010, the Liberals passed a law shielding the Site C dam from review by the B.C. Utilities Commission, the regulatory body responsible for ensuring BC Hydro’s rates and shareholder returns remain fair and that projects like Site C are necessary and in the public interest.

However, the province may be having second thoughts about the wisdom of Site C. Earlier this month, Bill Bennett, the newly minted minister of Energy and minister responsible for Core Review, suggested that B.C. needs to critically examine BC Hydro’s Site C dam proposal.

Many agree that with a price tag of almost $8 billion, a thorough, objective analysis of whether this project is even necessary, let alone in the best interests of British Columbians, is long overdue.

Among these is the Peace Valley Environment Association (PVEA), a conservation group based in Fort St. John. This month, PVEA filed a complaint with the commission over BC Hydro’s bypassing of its regulatory oversight and asking it to review the Site C proposal. Like Minister Bennett, PVEA is skeptical of BC Hydro’s financial claims and concerned about exactly how much this project could end up costing the public.

The idea is not novel. Typically, public utility projects must receive Commission approval before they can be built. BC Hydro is relying on the 2010 exemption to bypass this important regulatory process.

But a lot of things have changed since the Clean Energy Act was enacted, and the beefed-up Site C that BC Hydro wants ratepayers to back has greatly exceeded the Site C described in the law.

For starters, its sticker price has shot up 58 per cent from the original $5 billion to $6.6 billion estimate. It will be larger, and take years longer to construct, which means longer before any benefits would be realized, with more opportunities for additional delays and cost escalations.

In light of BC Hydro’s budgeting track record, ratepayers can hardly be blamed for worrying about footing a much larger bill than BC Hydro’s $8-billion estimate. The Northwest Transmission Line (which was also exempt from the commission’s review) is projected to cost $617 million, a whopping 53 per cent more than originally forecast.

BC Hydro’s debt of more than $15 billion is nearly double what it was in 2010 and is expected to rise to $18.85 billion by 2015. As a result, the dividends BC Hydro pays to the province will be cut almost in half.

And who would foot the bill? Ratepayers, of course. As a Crown corporation, BC Hydro’s debt is borne by the public. While the requirements for certification are simple — the project must be necessary for public convenience and necessity — the process involves just the kind of robust, transparent and thorough investigation and analysis that Minister Bennett has agreed Site C needs. The commission is the best placed to probe BC Hydro’s proposal and answer the $8-billion question: is the project even necessary?

Yes, Site C is undergoing an environmental assessment, an important part of responsible development. But passing off responsibility for reviewing all aspects of a major energy project like Site C to an environmental assessment panel would be like entrusting brain surgery to your family physician. As a specialist body that has conducted countless such investigations before, the commission has the experience, expertise and regulatory tools needed to help ensure that British Columbia ratepayers are not on the hook for an $8-billion mistake.

Which is why PVEA, along with the Treaty 8 Tribal Association, Sierra Club B.C., Yellowstone to Yukon Conservation Initiative and West Coast Environmental Law, emailed an open letter to the premier, Minister Bennett and other MLAs last week asking the province to support the complaint and ensure that the commission fully investigates Site C.

In light of BC Hydro’s maxed-out debt-equity ratio, the massive capital costs it is facing to upgrade aging infrastructure, recent requests to increase rates and strong indications that its current business practices are unsustainable, surely even this government concedes that B.C. Utilities Commission oversight is necessary to ensure the economic and social viability of Site C.

Anna Johnston is staff counsel with West Coast Environmental Law.

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Time to crunch the numbers on BC Hydro’s Site C

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